Wednesday, March 31, 2010

I won't get into the politics of the off-shore drilling but I do question the way this story will be presented to the American public as a way to lower costs.

Let's clear up a couple of misconceptions. Oil is over $80 again not because of increased demand or limited supply but rather investor demand. Oil is plentiful and the refineries are voluntarily running way below capacity in an effort to support a higher oil price. This ultimately works its way to you and I in the form of $3/gallon gas. Consider the following excerpts...

“People are using oil as a store of value rather than as a commodity,” Beutel said. “It’s the investors who are buying.”There’s no shortage of oil inventories, which are above their five-year average and have been rising steadily in the past three months. Gasoline stocks are also well above their five-year average for this time of year.

But that hasn’t helped at the pump.

Beutel estimates that, after oil prices crashed last year, American consumers saved some $117 billion at the pump compared to what they spent in 2008. But with prices rising again, American drivers paid $20.2 billion more to fill up in the January and February than they did in the in the first two months of 2009. At that rate, consumers will take a $100 billion hit in 2010 just from higher gas prices."

On a somewhat related topic have you seen the trailer for "Gasland"?

The key clip comes in somewhere around the 0:50 into the video when the homeowner sets his water on FIRE! This has some relevance for our neighbors to the south that are considering Hydrofracking for natural gas in the NYC watershed. Exploding water faucets in NYC might make hurt the manhattan real estate market just a bit :)

*******************************************************************I've mentioned it many times before, but the state pension gaps really deserve more attention than they are receiving today. At last night's community school budget meeting people seemed to be obsessed with sports budgets which are a tiny fraction of the overall budget. However our school's contribution to pension and healthcare premiums -- which are skyrocketing -- received very little public commentary.

"California, New York and other states are showing many of the same signs of debt overload that recently took Greece to the brink — budgets that will not balance, accounting that masks debt, the use of derivatives to plug holes, and armies of retired public workers who are counting on benefits that are proving harder and harder to pay. Pensions are debts, too, after all, paid over time just like bonds. But states do not disclose how much they owe retirees when they disclose their bonded debt, and state officials steadfastly oppose valuing their pensions at market rates.

Joshua Rauh, an economist at Northwestern University, and Robert Novy-Marx of the University of Chicago, recently recalculated the value of the 50 states’ pension obligations the way the bond markets value debt. They put the number at $5.17 trillion.

After the $1.94 trillion set aside in state pension funds was subtracted, there was a gap of $3.23 trillion — more than three times the amount the states owe their bondholders.

“When you see that, you recognize that states are in trouble even more than we recognize,” Mr. Rauh said."

Tuesday, March 30, 2010

Since Jan 1, 2009 the Federal Reserve has been buying mortgage backed securities like a bridezilla in Filene's.

But the clock is ticking and Cinderella was just seen stumbling down the staircase because the Fed will end this program as of midnight tomorrow. So far we've put $1.25 TRILLION of mortgage backed securities on our balance sheet. This is now the single largest asset held by the Fed. Let's see if Mr. Market can handle trying to operate without a giant crutch. There could still be one more little spurt in buying at the low-end of the housing market as people try to take advantage of the government one last time via the 1st time homebuyer tax credit.

We'll see.

*********************************************************************Just wait until the powers that be get their arms around this idea from the Swiss...

"If you thought we had it bad here in Australia, think again. A Swiss driver has received the speeding ticket of the century, $312,000 (£180,000) for driving 137km/h through a village with a 80km/h speed limit.

No, he didn’t kill anyone, nor did anyone get hurt. Even his red Ferrari Testarossa was undamaged. The reason the fine is so high is because of the laws the Swiss have enacted to combat speeding.

The high speed fines are calculated based on the motorist’s wealth, in this case assessed by the court as $24m, it also didn’t help that he was a repeat offender*************************************************************************It's good to be doing god's work.....*"In the latest Goldman Sachs (NYSE: GS) controversy, the gilded firm has raised brows for advising big clients to short California-issued municipal bonds, which the firm itself underwrote for the state, reports ProPublica.

The facts are not shocking really. They demonstrate the many ways a bank can generate profits. They issued the bonds. They made markets in the bonds. But they also advised big clients to invest in credit defaults swaps on the California bonds, and made markets in those derivatives, a very lucrative endeavor."* This references a quote from Goldman's CEO that the firm was doing god's work.

"Vandals knocked out the streetlight in front of the Lopezes' five-bedroom home and then took advantage of the darkness to try to steal a van. Cars are parked four deep in the driveway next door, where a handful of men rent rooms. And up and down their block of handsome single-family homes are padlocked doors, orange "no trespassing signs" and broken front windows.It wasn't what the Lopezes pictured when they agreed to pay $440,000 for their 5,000-square-foot house in 2006.Vacant homes are sprinkled throughout Willowalk, betrayed by foot-high grass. Others are rented, including some to families that use government Section 8 vouchers to live in homes with granite countertops and vaulted ceilings.When the development opened in 2006, buyers were drawn to the area by advertising describing it as a "gated lakeshore community." Now, many in Hemet call Willowalk the "gated ghetto," said John Occhi, a local real estate agent.There are dozens of places like Willowalk, and they are turning into America's newest slums, says Christopher Leinberger, a visiting fellow at the Brookings Institution. With home values at a fraction of their peak, he said, it no longer makes sense to live so far from the commercial centers where jobs are concentrated."We built too much of the wrong product in the wrong locations," Leinberger said."Cheers!

Monday, March 29, 2010

"turns out the job of dog-kennel assistant is even less glamorous than it sounds.

There are bad hours (lots of weekends and holidays). There's low-as-it-goes pay — as in minimum wage, $8.55 an hour.

You want to be the kennel helper? You're on the hook for the poop. You'll spend part of every day scooping it up (if all digestive systems work as designed) or mopping it (when they don't).

"It's not most people's dream job," Palumbo laughs. "Usually I get high-school kids applying. Or maybe a college kid for the summer.

"I've never seen anything like this."

Two weeks ago Palumbo posted a want ad on Craigslist for a part-time dog-kennel assistant.

So far, 260 people have applied.

And they say the recession is over?

Who now wants to be a dog-kennel assistant?

A laid-off graphic designer applied. So did a freelance photographer. Two out-of-work teachers sent résumés. Remarkably, so did someone in their mid-40s who had worked as a financial controller at an environmental-services company.

"There are a few people in here, such as accountants, who are so overqualified for this job," Palumbo said. "I know people just want to work but I don't think it would make much sense for me to hire them."We now return you to your regular happy-time programming.

That's the take-away from today's Consumer Income/Spending report. Incomes remained relatively flat but spending jumped again in February and the savings rate fell again.

"Personal income increased $1.2 billion, or less than 0.1 percent ... Personal consumption expenditures (PCE) increased $34.7 billion, or 0.3 percent.Personal saving as a percentage of disposable personal income was 3.1 percent in February, compared with 3.4 percent in January."

I'm always looking for the drivers of these moves and I suspect that some of the tax credits this year boosted tax refunds for lower and middle class families. These tend to be the first filers of the tax returns and many of them claimed refunds in February. Lower and middle class families also tend to spend a greater proportion of their refunds. This is mostly anecdotal, but I'd suggest that this had an impact in February.

The guy that showed up at my house with a car in tow that he bought in the am and cash to buy my ATV seemed to fit that demographic.

The economic "recovery" story can only go on so long when incomes are flat and we're again spending our way to oblivion.

"Software engineer SatishSawant, his wife and 5-year-old son escaped from the silver TataNano -- which still bore a celebratory garland of marigolds on the front hood -- before the tiny car was engulfed by fire.

A chauffeur initially was at the wheel, but Sawant said he had taken over driving before the fire broke out."

You have to love a country where you can afford a chauffeur to drive your $2,500 death tr... I mean, dream car.

"It has as few moving parts as possible. There's only one windshield wiper, one side mirror and the headrests aren't adjustable. The dinner-plate-sized wheels have three bolts rather than four. The tiny trunk doesn't open; you access it from the inside, behind the rear seats."

Sunday, March 28, 2010

"Zhejiang Geely said it planned to retain production of Volvo cars in Sweden, but it is expected to build another assembly plant for them in China, most likely near Beijing or Shanghai."

******************************************************************************This graphic doesn't necessarily surprise me but it does seem like we might have a little excess inventory when it comes to aircraft carriers. Maybe Geely would like to pick one up from us on ebay?

***************************************************************************Get ready for the flood of "EMPLOYMENT JUMPS IN MARCH" headlines this week. Economists expect a 190k jobs were added in March but the vast majority of the jobs added in March were Census jobs. We'll have to estimate what the impact of those jobs was to get a real projection for the month. However, that won't matter on Friday morning - the happy/happy/joy/joy cheerleaders will be out pumping up the "recovery".

***************************************************************************Yikes, I thought NYS was going traffic ticket crazy, until I saw this data from TEXAS -

"The top forty speed traps in the state of Texas raked in a total of $178,367,093 in speeding ticket revenue between 2000 and 2008 despite having a combined population of less than 56,000 residents.He found that the town of Westlake issued an average of 38 tickets worth $4696 each year for every resident."

*************************************************************************This is pretty "Area 51" stuff, but if you've ever been tempted to "BUY GOLD" through one of the many ETF's that trade like a stock you might want to click over to this article. They imply that there is a MONSTER ponzi scheme in the electronic gold market right now and that if anyone actually demanded the gold that's being traded -- Houston, we'd have a problem.

In Clayton we'd probably take a quick picture and move along. In NYC "The police had four patrol cars, two motorcycles, four unmarked police cars and an emergency services truck. They also had a view from above, thanks to a police helicopter." I think we either have too many cops in NYC or too little crime if we can assign 12 vehicles to chase a coyote. On a related subject, I saw 4 cars pulled over on Rt. 12 from Watertown to Clayton. Be careful.

Well, we've tried tax credits and modifications and moratoriums on foreclosures and held interest rates at record lows and the housing market is still struggling so it's on to plan y - loan forgiveness.

"The Obama administration announced programs to help homeowners avoid foreclosure, including subsidies for borrowers who owe more than their home is worth.

The plan expands Treasury Department and Federal Housing Administration efforts and uses funds from the $700 billion Troubled Asset Relief Program. The administration faced a week of criticism from lawmakers and watchdog groups who say the government hasn’t helped enough homeowners stave off foreclosures."You know I borrowed a bunch of cash to buy shares of Lehman Brothers in 2006 and that's worth far less than what I owe, do you think you kind hearted taxpayers could make me whole? Oh, and my beanie baby/ebay obsession of 1998 is still wreaking havoc with my credit score. Could I get some TARP money to cover that as well?

Of course not, but this is the logic of these plans. Some taxpayers made a poor financial decision and overpaid for houses they could never afford. Now, they are stuck and the banks are stuck. Instead of letting the system heal itself through orderly liquidation, we keep throwing money at the problem. Housing has become the elderly medicare patient that runs up $112k in bills and gets a new hip before dying in the ICU. I'll volunteer my services to head up the death panels for the housing market.

In the markets where foreclosures are moving quickly inventory is being absorbed by investors and the markets are actually recovering. This can't happen with more programs that seek to save us from our own financial stupidity.

I should note that there aren't many details around this plan, so this might be more PR hype than actual policy.

****************************************************************************Yeah, we're rallying on another Greek Bailout rumor. How many times can they bailout one country? This reminds me of the Lehman/AIG/MBIA rumor days when the market would rally up on every rumor.

The third estimate of 4th quarter GDP was released and it was revised downward slightly. The components were interesting though - consumer spending and residential investments - two leading indicators - were both cut fairly sharply. This might bear watching. However, this data also includes a supposed 19% jump in equipment and software spending in the fourth quarter. I'd like to ask for feedback from the software sales guys and girls - did it feel like sales jumped 20%?

Hmm, just when the sh^#t's about to hit the fan, Bank of America is suddenly working to "help" people that wildly overpaid for houses that have plunged in value. Color me skeptical.

There are also rumors that the Treasury might be considering a similar plan to be announced next week. Why not? Bailouts for the reckless and a sharp stick in the eye for the prudent.

* Sales of new homes hit an all-time low in Feb. - This isn't entirely unexpected because of the string of snowstorms in February. Also, consider that some demand was pulled forward with the first round of tax credits and people might be sitting on the fence waiting to see if the next round of tax credits expires or maybe the gov't doubles down.

* How many helicopters would you guess that the Houston PD owns? 1, 2, 4? How about 13 with 10 of them being the fancy $2 million+ variety. Spiffy.

* Have some fun clicking around the Census "Take 10" map to see local participation rates. NYS is running about average right now at 18% but I'm really surprised that participation rates are still so low. Overall, participation was about 72% in 2000, if you want to save the Federal government a couple of nickels we should all try to push that number up as close to 100% as possible.

There have been some progressive high schools in the US that have tried to shift the school day with varying degrees of success. It's clear to anyone that has watched the zombie-like teenagers stumbling to the 6:45 am buses in NNY or rolling off a 2:40 bus that the current school day is not conducive to learning.

"Early results indicates that general absence has dropped by 8% and persistent absenteeism by 27%."

Our school day was built around an agrarian society when students needed to be home with plenty of daylight to help with the afternoon chores. That era ended about 40 years ago and we need to move on. The most consistent argument against this move is that it would cause chaos for after-school activities like sports. Sports are a nice add-on to the educational experience, they should not be a rational for hindering the performance of the entire student population, in my opinion.

I'd love to see one of the smaller local districts make a progressive move and try this for a year. I bet they'd see a spike in enrollment, higher real estate values and higher property tax roles. Any takers?

Tuesday, March 23, 2010

I don't get it. It's clear that states like NY and California are broke and need to cut their spending drastically, yet every attempt to cut spending is met with protests and the legislature seems to cave every time.

NY's governor proposed cutting $1.1 billion in aid for education. Now the legislature is going to cut that to just $500 million. Schools will see that as a manageable gap to meet through higher taxes and we'll maintain the status quo. Schools are critical to the future of our state but the return on our investment is subpar. But as we did last year, we'll kick the can down the road and hope next year is better.

The governor also proposed cutting a few prisons that don't seem to be doing anything accept transferring tax dollars to local communities. Nope, can't do that either.

I'm convinced that the stimulus from 09 and the miraculous rally on Wall Street have given people a false hope that things are returning to "normal". Nothing could be further from the truth, in my opinion. Talk to people in the field and you'll be sufficiently depressed.

Consider the following from the Federal Reserve's San Francisco Office:

"We’ve seen no let-up in the pace at which borrowers are falling behind in their loans. Further additions to the already swollen stockpile of vacant homes represent a threat to house prices and new home construction activity. Last year, for example, the share of mortgages that was 30 to 89 days past due declined. On the face of it, that looked like a hopeful sign. Unfortunately, when my staff examined the numbers more closely, it turned out that the drop actually represented a worsening of mortgage market conditions. What you want to see is delinquent borrowers becoming current. Instead, what happened was that delinquent mortgages moved in the other direction to an even poorer performance status. Many wound up in foreclosure. All in all, I expect that the share of loans that are seriously delinquent will continue to move higher."

I feel like the lone sober guy on South Padre Island. Everyone thinks they're partying like a rock star, but they just look like sloppy drunks to me.

Monday, March 22, 2010

Nothing new. Markets held their bid all day despite little news that wasn't Healthcare related. Talk of prospective Al Qaeda attacks in the Red Sea/Gulf of Aden/Suez Canal shipping lanes pushed oil up further again today to a little over $81/barrel.

* This story on the crashing 2nd home market in Nevada is pretty interesting to anyone long waterfront/vacation property in NNY. Things never got as bubbly up here as they did down South and out West, but it's pretty clear that assessed values have at least doubled in the past 7 yrs in NNY for waterfront property and these trends tend to revert to the mean over time.

"Incline is also a Mecca for libertarian millionaires drawn by the absence of a state income tax. Unfortunately, they also possessed the financial sophistication to buy trophy waterfront homes, extract cash-out refi’s all the way up, invest the proceeds in the stock market, and lose it all in the subsequent crash.

The result has been a meltdown of Biblical proportions in the housing market. Of the 8,000 homes in the village, 400 are for sale at distressed prices and another 400 or more discouraged sellers hang over the market. Brokers report a brisk business in short sales, foreclosures, and sales on the Washoe County Court House steps at prices down 60%-70% from the 2006 peak.

Jumbo financing is now an extinct species, unless you’re happy to pay a 250 basis pint premium over conventional loans. So the high end market has ceased to exist. One fabulous property on tony Lakeshore Drive, with every imaginable upgrade (a heated driveway, beveled glass windows, an elevator, and a fireplace in the bathroom?), originally listed at $14 million and sold for $4 million. Some properties have been on the market so long that snow drifts have collapsed balconies, the local wildlife have moved in, and prospective buyers are scared away by offensive odors. Break-ins by black bears have become a serious problem. Abandoned homes see their pipes freeze and burst, causing irreparable damage." I'd really like to have a home with a heated driveway at some point --- or maybe live in a climate that laughs at such a concept.

"The pressurized plane, which has a capacity for nine passengers and two pilots, is in a hangar at Phoenix Deer Valley Airport. In the next few months, a few seats will come out and it will be fitted for a special camera and a viewing monitor that will allow officers to conduct surveillance above 9,000 feet. The additional equipment will cost about $600,000, also coming from bond proceeds."* Weird news of the day - another reason to stay married - Wife wins $9 mil from alleged mistress.

Sunday, March 21, 2010

I'm really enjoying this Jamie Oliver "Food Revolution" show on ABC. His shows in the UK have actually had a pretty meaningful impact on school food programs. However, the fact that the show was being sponsored locally by Pizza Hut is disturbing on many levels :)

The menu of this school in West Virginia is almost spot on with local school menus. People often grumble about the cost "eating healthy" and this show is highlighting our battle with the Federal food subsidy programs. Note that less than half of 1 percent of Federal subsidies go to the production of vegetables and fruits while 74% of subsidies go to the meat/dairy industries. Is it any wonder that a salad costs more than a Big Mac?

“Sometimes you see only two cars go through there a day, and other times there are no vehicles coming through here at all,” she said. “We are talking about a port that is only open from 8 a.m. to 4 p.m. and is closed on Sundays and holidays. Most of the time the residents are the only people to use the port.”* Just to clarify - the Cold War is over, right? Russian firm to bid on US Air Force Tanker Program.

In another twist to the ongoing saga to replace the Air Force's aging fleet of aerial refueling tankers, United Aircraft Corp. of Russia is planning to bid on the $40 billion contract, according to a person familiar with its plans.

United Aircraft, an aerospace consortium owned by the Russian government, will seek to offer a tanker version of its Ilyushin Il-96 wide-body jetliner, dubbed the Il-98, this person said. The planes would be largely built in Russia, and assembled in the U.S., this person says.

Finally, a little bonus picture for my mom who just loves giant moths....

Thursday, March 18, 2010

Talk about an off-topic subject. This is pulled directly from craigslist's "best of craigslist" but it has relevance because it mentions local roads with deer that have loads of speed traps and it apparently occurred in Ithaca. The "Faded Glory" dig is priceless.To the guy who tailgated me for 20 miles this morningI get it. You wanted to go faster, and given that you drive a MitsubishiLancer maybe you are under the impression that you are fast and/or furious. I’m the guy who was in front of you for 20 miles from Alpine Junction to Ithaca, driving at various speeds with the constant being that you were so close to my rear end it felt like I was trapped in a changing room with Richard Simmons.

We met at 61 mph, a nice speed for Route 13 — fast enough to not take forever and slow enough to go unremarked by the many police who patrol that road. You were unsatisfied and expressed it by staying a cool 5 feet off my bumper. I slowed down gradually to 55 mph. This was one of several opportunities to pass me, but you just slowed down too and stayed back there like you wanted to turn on a Sting album and spoon me. So I sped up again hoping that you’d get the message and let me keep the distance I had won between us…but no, you are a jealous sharer of the road, Mitsubishi Lancer. You caught up. For 10 more miles we were like cellmates and you tried to make me your b$^^$, but all you succeeded in doing was going 13 miles an hour slower than when you started tailgating me. How did that work out for you?Coming down the hill into Ithaca I sped up again, figuring you’d been punished enough. So when you tried to give me the Sneaky Pete again, I admit I lost my cool and touched the brake for the first time. I hope you spilled your coffee on what I imagine were your Faded Glory pleated khaki pants. Then, in the two-lane road in town you didn’t go around. You proceeded to follow me all the way to my parking place before giving me a look and going on your way to, I assume, the DMV where you work.

I offer you these common sense tips:1. Tailgating is a d*** move, and it’s even more of a d*** move if the guy in front of you is already well above the speed limit on a well-patrolled road.

2. If you are tailgating someone and they slow down, that’s your cue to pass and if you can’t pass, well then screw you because you are being a d*** anyway.

3. It actually makes sense to leave some distance for you too. Have you seen all the deer carcasses on the road? That’s because cars hit them. If a deer jumps in front of me and I have to slam on the brakes, I don’t want you crashing into me. Based on your body, I'd guess your reaction time is only fast in World of Warcraft.***************************************************************On a separate but related issue, does anyone know NYS law regarding passing in the shoulder? When I learned to drive a 100 years ago I remember it being a definite no-no, but now, it's not only commonplace, it almost feels as though it's expected that cars will pass in the shoulder.

To turn onto my block you have to make a left turn across rt 12. Occasionally, there will be enough traffic that it is unsafe to make that turn without coming to a complete stop. In the last few years I can remember only a handful of cars that did not fly by me at 60mph in the shoulder. This must be illegal I'd tell myself, they are just lucky that one of the 85 different police cars that seem to drive past my house every hour wasn't here to see them.

Does anyone know if this is still illegal and everyone just feels comfortable breaking the law in order to save 6 extra seconds of commuting time?

I'm very tempted to get one of the those fake security cams to deter such activity. However, setting up a fake security cam within 10 miles of the border would probably get me 35 years in Gitmo.

Wednesday, March 17, 2010

The markets rolled on to new 18 month highs on light volume despite traders ducking out early for a little St. Patrick's Day pub crawl. It's important to note what is behind this latest surge - strength of the Euro.

The Euro has been firming every time another "We've rescued Greece" story starts working it's way around the web. The firming of the Euro has weakened the US dollar. As I've said a thousand times falling US dollars push up prices of commodities (including stocks). Oil, gold, and stocks have all been on a roll for the past week. Just make sure your trading profits will cover the cost to fill up your tank next week.

If this is a normal recovery things might look a little different....

"But if this were a normal cycle, then:

Employment would already be at a new high, not 8.4 million shy of the old peak.

The level of real GDP would already be at a new cycle high, not almost 2% below the old peak.

Consumer confidence would be closer to 100 than 50.

Bank credit would be expanding at a 14% annual rate, not contracting by that pace.

The Fed would certainly not have a $2.3 trillion balance sheet

And, the government deficit would not be running in excess of 10% of GDP or twice the ratio that FDR ever dared to run in the 1930s.

If this were a normal cycle, then there would be a ‘clean’ 5-6 months’ supply of homes on the market, not the 21 months overhanging as is the case now when all the shadow inventory is included from the foreclosure pipeline.

If this were a normal cycle, then the funds rate would not be near zero and one in six Americans would not be either unemployed or underemployed.

If this were a normal cycle, then mortgage applications for new home purchases would not be down 13.9% year-over-year (just reported for the week of March 12) on top of the already depressing 29.4% detonating trend of a year ago.

But the perception that this is turning out to be a normal sustainable expansion is strong and pervasive, although the reality is that this is just a brief statistical bounce aided and abetted by unprecedented government bailouts and intervention."***********************************************************************The joy of squatting... There seem to be a ton of stories out right now about people that have just "stopped paying" and the banks can't catch up with the backlog. I can't figure out if there is a bubble in "stopped paying" stories or if there is a real hidden backlog of people that have stopped paying.

I first profiled today's featured property back in September of 2009 in the post Bluebell, a shocking example of gaming the system here in Irvine.

The owner of today's featured property paid $465,000 on 10/23/2003. She used a $372,000 first mortgage, a $93,000 second mortgage, and a $0 down payment.

On 12/30/2004 she refinanced into an Option ARM for $486,500.

Two months later on 2/3/2005 she opened a HELOC for $67,000.

Total property debt is $553,500 plus 3 years of missed payments, negative amortization, and fees.

Total mortgage equity withdrawal is $88,500.

Consider what this woman accomplished:

She put no money into the transaction. None.

She extracted $88,500 in just over one year. That is nearly the median income in Irvine, and that money came to her without tax withholding.

She has lived in the property since 2003, and in the full term of ownership, she has not made payments totaling what she pulled from the property.I admit to feeling foolish. I looked at property in late 2003, and I deemed it too expensive. It never occurred to me that anyone could accomplish what this woman has done, or I might have followed in her footsteps. I feel like an idiot struggling to actually pay for my housing costs when I could have obtained a free ride for the last seven years. I hope lenders know that California borrowers are learning their lessons well."*************************************************************Weird news of the day: A former Massachusetts dentist is accused of placing paper clips instead of stainless steel posts inside the teeth of root canal patients while billing Medicaid for the more expensive parts.

* A pretty powerful forecaster has said that the markets might get pretty dicey over the next 2 months. The markets continue to power higher on little news right now, we'll see how long it continues.* I won't link to it because of some fairly rough language, but if you google chatroulette piano improv you'll be treated to some comedy gold.

Given that it appears that no one knows exactly what is in the final healthcare reform bill it is a little presumptuous of me to analyze the bill, but that's why they pay me the big bucks :)

First, a little caveat - I voted for President Obama and I am a supporter of universal health care. If that makes me a Marxist, socialist, commie, pinko, lib or whatever term they are using in Glenbeckistan today, sobeit.

Here's what I know - health care in our country is broken.

* costs are out of control* we fail to address end of life issues* we treat every ailment with a pill or a surgery* the baby boomers will bankrupt the nation with their healthcare needs.

Healthcare reform is much like education reform. It is clear that the single greatest predictor of educational success is parental involvement and support. However, kids continue to struggle as parents can't be bothered to turn off American Idol long enough to ask if Jack is still disrupting the class or how her teacher is handling reducing fractions. The single greatest "reform" we could undertake as a nation would be to take ownership of our own personal health and fitness and stop asking the government to save me when my body breaks down at 36 because I have a BMI of 34 and I still smoke 2 packs a day. However, that won't happen so.........

From what I've seen of the Senate bill none of the hard choices have been made. We continue to kick the can down the road hoping that by the next Congress and President will have the fortitude to deal with truths that we can't handle.

At least the House adequately addressed the issue of paying for healthcare reform through higher taxes. The Senate appears to have no backbone and thus, attempts to pay for some of the cost through fees on services and medical equipment while deferring major taxes on some health plans for 10 years. When it comes to implement this part of the "reform" to cover the costs, a whole new crop of knuckleheads will be in Washington getting ready for another election cycle so you can bet the tax will be repealed.

In essence we have a massive unfunded mandate that will increase coverage for some but not all citizens. In the best of times, this might have been an interesting idea. Now is not the time to be reaching for expensive partial solutions. Again, this plan would probably improve the healthcare situation for millions of Americans and I could see the value of this plan if it was funded.

Scrap this plan and come back in December of 2010 with medicare for everyone funded by tax hikes.

Unpopular? Yes.

Is it the only real chance at saving our healthcare system? You betcha!

Monday, March 15, 2010

I noted last year that the move to allow homebuilders to utilize net operating loss carrybacks for up to 5 years was a giveaway to the industry. For those without a law degree in tax theory, the basic idea is that if you lost $100 in 2009, you could carry those losses backwards for up to 5 years to offset previous profits. When your profits go away suddenly you are able to file an amended tax return and ask for a refund of the taxes you paid. Ain't life grand.

Well, take a guess at what years were the most profitable for home builders? 2004-2008 is a pretty good starting point. The rule change last year incentivized builders to have huge losses to offset previous profits and reap larger refunds. Consider this data on the most recent quarter for the housing industry.

Those large negative numbers in the "income tax" column are actually refunds received in the quarter. Pulte $800million, Lennar $320million, Hovnanian $291million....

In the grand scheme of our recent moves to save the economy this is a drop in the bucket, but that doesn't make it feel right.

While on the subject of taxes consider this reminder from the New Yorker that private equity managers and hedge fund managers are able to reap huge paydays and pay a lower tax rate than your average teacher.

So a manager controls $100 million of assets and they charge a 2% management fee or $2 million. Now if there are any profits on the assets in a given year, the manager gets to keep up to 20% of the profits. In our example assume there were $10 million in profits.

So the manager pays the standard tax rates on first $2 million, but he or she pays just 15% on his share of the funds profits (the second $2 million) because they are treated as capital gains.

In my example this is a relatively small amount of money but in the real world this loophole costs the US billions/year in lost taxes. However, closing the loophole might just chase these managers offshore so I'll let Congress make that call.

*******************************************************************

I don't have any unique insight into this story, but zerohedge has some pretty plugged in sources so when they say that "there was an arms shipment to Diego Garcia, which consists of "of 195 smart, guided, Blu-110 bombs and 192 massive 2000lb Blu-117 bombs...put in place for an assault on Iran’s controversial nuclear facilities." it is worth paying attention to.

Given the US financial situation, looming trade wars with China, the healthcare debate, etc., a couple of years ago I would not have been surprised by an effort to start a war to distract the nation from our troubles. I hope we've moved past that era, but I could be mistaken.

If Iran's on our hit list, it will make some banks that have been buying up all the black gold they can find very happy and it won't surprise me if gas hits $4.00 overnight.

However, I'll note that we have been known to move things around the world to make thinly veiled threats that never turn into anything. Only time will tell....

Sunday, March 14, 2010

Quants are the generic term given to the traders using computer models to buy and sell sectors of the market in rapid fire succession. The power of quants in the market has been growing over the past couple of years but their dominance now is truly stunning.

Without getting into the gory details, consider the action in one particular stock last week that announced disastrous earnings that in the good old days would have hammered a stock down 10-20% in a single day. However, when the stock opened the next day it proceeded to march upward with the rest of the market just like nothing had happened.

"Looking outside of China, Mr. Wen said the world might face a "double dip" recession amid risks in financial systems and continued high jobless rates in many countries.

Mr. Wen also gave a robust defense of free trade. "I am a strong supporter of free trade," he said. "Free trade can not only promote the growth of the world's economy but it can promote peace in the world."

And without a trace of irony, the Premier went on to say....

"In a possible reference to U.S. policy on the dollar, he said, "What I don't understand is depreciating one's own currency and pressing other countries to appreciate their own currencies just for the sole purpose of increasing their trade," Mr. Wen said. "In my opinion this is trade protectionism."

"However, Team 5 Investigates found the Amesbury Water Department pulled fluoride from its system amid concerns about its supply from China.

Department of Public Works Director Rob Desmarais said after he mixes the white powder with water, 40 percent of it will not dissolve. "I don't know what it is," Desmarais said. "It's not soluble, and it doesn't appear to be sodium fluoride. So we are not quite sure what it is."

Since 2007, most of the sodium fluoride has been imported from China because it's the least expensive on the market.

And this is the key quote that I complete agree with...."I don't think that when it comes to something that I ingest every day that the lowest bidder is good enough," Stewart said.******************************************************************After China's empty airports now consider China's empty airports...

Handling just two flights a week hasn't fostered a deep sense of urgency for the 50 or so workers at the airport. On this night, a garage door-sized video monitor displays a single arrival and departure.This is not how things were supposed to be when the $57-million airport opened in late 2007. Local officials were so confident that tourists would flock to this beautiful, mountainous county in southwestern China that they made the terminal big enough to accommodate 220,000 passengers annually, and built a runway capable of handling a 140-seat Boeing 737.A grand total of 151 people flew in and out of Libo last year. China has added about 40 airports in the last decade alone, bringing its total to 166. But in the mad dash to expand China's civil aviation system, many new airports are lacking one important thing: passengers. Spurred by federal infrastructure money, easy bank loans and the cachet of having planes land in their backyard, many small cities jumped at the opportunity to lay down runways and open terminals."An airport is like a business card for the city. It can boost tourism and the economy," said XuHongjun, a professor at the Civil Aviation University of China. "But a lot of small airports are not doing well. They need a lot of subsidies from the central government. They were too optimistic."

Friday, March 12, 2010

So, I guess the snow kept people from working but not from shopping? It didn't take people very long to see through the latest retail sales numbers despite Bloomberg's best efforts to put a positive spin on the data...

"Sales at U.S. retailers unexpectedly climbed in February as shoppers braved blizzards to get to the malls, signaling consumers will contribute more to economic growth.Purchases increased 0.3 percent, the fourth gain in the past five months, Commerce Department figures showed today in Washington."There are two key observations:

1 - The February number was up ONLY AFTER THE JANUARY NUMBER WAS REVISED DOWN. Assume your kid comes home with a 100% on their spelling test this week. Next week they bring home a 91% and tell you "but Mom, that's up 1% from last week! My teacher revised last week's test to a 90%, so you see, my trend is up!!!"

This is the game in statistics - people play with data to make headlines look good because the revisions are always forgotten. It's also interesting to note that sales tax receipts continue to plummet around the nation, but somehow retail sales are climbing. What's a better gauge of economic activity - actual sales tax receipts or a statistical model? I'll let you decide :)

2 - Gas sales were up 24% in February because prices have spiked. People aren't using more gas, it's just prices are up. If there was any gain in retail sales in Feb (I expect revisions to show a slight decline), it was almost all due to higher gas prices.

Thursday, March 11, 2010

Maybe it's the warm weather -- we had our first robin sightings in Clayton today -- or maybe it's the fact that we passed the anniversary date of the bottom without incident, but the market continues to power higher on very thin volumes. The market is being pushed up by just a couple of names and note how the market spiked again right at 3pm.

The markets liked the news that foreclosure activity slowed from Jan to Feb (however, it was still up vs. Feb 09 so that to me signals things are worse than last year) and ignored the fact that the miserable weather in the Northeast probably contributed substantial to slowdown.

Also, for the armchair technicians in the crowd, the key number that everyone wanted to clear was 1050.23 on the S&P500. So where did they close the market? 1050.24

You can't make this stuff up.

Commodities are hot, oil is rocking again, it's 2007 all over again. Without any underlying growth of course, but the bubble is being primed again. We'll see if it holds......

***********************************************************Stat of the day: Visitors to Shanghai alone can look up at a skyline dotted with 3,780 skyscrapers versus 15 in 1978. That's just over 30 years. It's been almost 9 yrs since 9/11 and we're still bickering and suing each other instead of rebuilding the WTC. Shame on us.

***********************************************************Finally, a little more info on Carrie The Prius.... When will people learn that given 6 hours and enough bored tech people in California you can find out just about anything about anyone....

Runaway Prius Driver owns adult swinger website - you can search Jalopnik.com for the story. If you're bored the 911 call is interesting -- there's not a lot of panic in the driver's voice :)

Wednesday, March 10, 2010

There was a slight reduction in oil supplies and gasoline stockpiles dropped as refiners pulled back their refinery operating rates. Oil seems to be trending toward the mid to high - 80s and that's probably going to be reflected in gas hitting $3.25/gallon in NNY over the next month or so.

There's a good deal of speculation that the major traders are long the oil market right now so the trend is likely to be higher until someone realizes that $4 gas is bad for a mid-term re-election campaign.

********************************************************************I'm sure this will end well....

China's Bubble - "That means that a middle-class family of three looking to buy a modest 80 square meter apartment will have to come up with RMB2.4 million, or about $350,000.

This is pretty startling considering that the average annual income of urban workers only reached about RMB29,000 ($4,250) in 2008, as reported by Xinhua News Agency. The median multiple, which measures the ratio of the median house price to the median annual household income, has historically hovered around 3.0 or less in the US, but rose dramatically prior to the recent housing bubble.

If my estimates above are right, then the typical middle-class family is looking at a median multiple of about 80 to slip into a modest Shanghai apartment."********************************************************************I'll spare you the super-sized picture - you can check it out here - but there's an interesting list of the best prospective jobs for US workers based on salary, flexibility, satisfaction, job growth and stress levels.

What's really obvious is the heavy weighting toward health care. While on the subject of healthcare consider this op/ed by the scientist behind prostate testing. He has a great perspective .....

The Great Prostate MistakeThe test’s popularity has led to a hugely expensive public health disaster. It’s an issue I am painfully familiar with — I discovered P.S.A. in 1970.

Americans spend an enormous amount testing for prostate cancer. The annual bill for P.S.A. screening is at least $3 billion, with much of it paid for by Medicare and the Veterans Administration. American men have a 16 percent lifetime chance of receiving a diagnosis of prostate cancer, but only a 3 percent chance of dying from it. That’s because the majority of prostate cancers grow slowly. In other words, men lucky enough to reach old age are much more likely to die with prostate cancer than to die of it.

Even then, the test is hardly more effective than a coin toss. As I’ve been trying to make clear for many years now, P.S.A. testing can’t detect prostate cancer and, more important, it can’t distinguish between the two types of prostate cancer — the one that will kill you and the one that won’t.

Instead, the test simply reveals how much of the prostate antigen a man has in his blood. So why is it still used? Because drug companies continue peddling the tests and advocacy groups push “prostate cancer awareness” by encouraging men to get screened.Testing should absolutely not be deployed to screen the entire population of men over the age of 50, the outcome pushed by those who stand to profit.

I never dreamed that my discovery four decades ago would lead to such a profit-driven public health disaster.

*********************************************************************Finally, on the latest KILLER PRIUS ON THE LOOSE story - I immediately felt like this guy was Balloon Boy in a Prius. Nothing felt right about his story - he couldn't take his hands off the wheel to press the engine off button, but he was comfortable dialing 911?

There are at least 6 ambulance chasing law firms running national ads calling for Toyota owners to report sudden acceleration in order to cash in.... I mean, receive restitution for their pain and suffering.

News tonight has leaked that Balloon Boy in a Prius was up to his eyeballs in debt. From KGTV - "According to his bankruptcy records, he had a $700,000 debt. Additionally, his debts included two homes he was upside down to the tune of $240,000. He had credit card debt to deal with, including $12,000 owed to Bank of America, $38,000 owed to Citibank and $15,000 owed to Discover." Developing....Only in America.

"About 11.4 million out-of-work people now collect unemployment compensation, at a cost of $10 billion a month. Half of them have been receiving payments for more than six months, the usual insurance limit. But under multiple extensions enacted by the federal government in response to the downturn, workers can collect the payments for as long as 99 weeks in states with the highest unemployment rates -- the longest period since the program's inception."********************************************************************Weird news of the day....1) Opticians mix up a young girl's glass prescription. She's left with headaches and nausea for 2 years. Optician apologizes and offers $5 bottle of lens cleaner for her troubles. Yeah, that ought to make everything fine.

I haven't touched on housing lately mainly because the markets have been so uneventful. There's a little activity in low-end markets - like NNY - because the tax credit can be meaningful on an entry-level home, but the rest of the US has just flattened out.

There does not seem to be much movement in many markets because the "have to sell" people have sold and now most sellers are still clinging to dream-like 2007 pricing, while most buyers are trying to knock 30% off the lowest comp.

The quote of the day refers to the latest government efforts to prop up the housing market ---

"I stole that shell game idea from housing consultant Howard Glaser: “We’re spending tens of billions of dollars on a tax credit to get people to purchase homes, we’re spending federal money to keep them in their homes through the modification program, and now we’re going to pay them to move out of their homes. This is not a sustainable system for the housing market. It’s a shell game. Bernie Madoff could have created this system,” Glaser told me today.If you haven't heard about the latest program you can get a rundown here. I appear to be the only one concerned that bank assets remain wildly overvalued and that our banking system remains on the edge. If you look at the most recent bank failures they tend to have a common theme - the banks were saying they had assets of $100 and liabilities of $101, but they failed to note that their assets were really worth $65. This has been a fairly consistent ratio around the US. If the BIG Banks have balance sheets that look anything like the banks that have been failing this year it means that there are billions -- maybe trillions -- of unrealized losses hiding in the banks right now. The hope is that the housing market will rebound quickly enough so that these losses never have to see the light of day. We'll see....

**************************************************************************Speaking of housing -- Anyone want to buy a dated house outside of Philly in NJ with 4 bdrm, 3.5 baths, 5000 sq ft, 3 acres, 3 car garage and an indoor pool for $300k? Check it out here. Sounds like a pretty good deal actually, except for the whole living in South Jersey thing...

**************************************************************************Fact of the day: "The most stunning number in the report is that 27% of American workers have less that $1,000 in savings." Wow.

Monday, March 08, 2010

Today's volume in the markets was the lowest of 2010 and many are searching for meaning in this stat. I don't read much into this fact - it was a Monday with little news to move the markets after all - but I'd note that tomorrow is important for some tea leaf readers. Many momentum traders buy stocks based on their price relative to the stock's 52 week low. So if it a stock hit a low of $10 within the last year but is now trading at $20 they'll keep trading the name because the trend looks to be up (this is a wild oversimplification but bear with me).

Well, tomorrow is the mother of all bottoms 3/9/09 was the day we closed at the bottom of the crash and it was off to the races from there. Here's why tomorrow is tricky - after tomorrow's date, even if stock's hold their own for the next month their momentum will appear to be slowing because the 52 week low is going to be going up every day. While stocks are up 60-70% from the lows a year ago, almost half of that gain came in March of 09. By the time we hit April of 2010 the percentage of stocks trading 60-70% above their lows will plummet substantially (barring another huge March rally). This could get the chart readers a bit worried, but we won't know until we see it unfolding in the market.

The Cost of Competing with China -- A groundbreaking deal for a 55 per cent increase in coking coal prices, a key input in steelmaking, has been agreed between BHPBilliton, the world’s largest miner, and JFE Steel of Japan. The contract, which will run only for the quarter between April and June, marks a break with decades of tradition under which contracts were agreed on an annual basis.

This new deal with see JFE pay $200 a tonne for coking coal instead of the $129 a tonne under its current annual contract which expires at the end of the month.

This shows how aggressive countries have become in competing with China for natural resources. "China has become a black hole, and the Japanese steel makers are trying to lock up their supply," Burns said.

An 11-year-old boy from Azerbaijan became the owner of nine waterfront mansions.The total price tag: about $44 million -- or roughly 10,000 years' worth of salary for the average citizen of Azerbaijan.

But the preteen who owns a big chunk of some of Dubai's priciest real estate seems to be anything but average.

Basically, the 11 year old son of Azerbaijan's President - who makes a cool $228k/year - has found a way to leverage his connections to the tune of $44 million worth of plummeting Dubai real estate. If you get a chance you should read up on the President of Azerbaijan - he's a piece of work.

Sunday, March 07, 2010

Mr. Market loved the jobs report and it was really no surprise. If the jobs report was terrible, the bulls could blame the snow and if it was ok (with a nice boost from 97k phantom Birth/Death jobs) it was going to be off to the races.

Random observations:

This is an extremely local issue but I think it typifies why we are at such a competitive disadvantage relative to other developing countries right now.

You can't just go tear it down because first the DEC has to give the all clear. Then, you have to fight over who will pay the $1 million tab to tear down the building (don't quote me on that number, but I think I heard that estimate floated once). The State is broke, the City doesn't want to pay and wants to seize the owners land to cover the cost, etc, etc. In the pre-OSHA days my friend from Poughkeepsie would have had a crew in Syracuse leveling that building in 2 hours for about $22k in small, unmarked bills -- sorry, that's a wildly inside joke, but I know one guy in NH rolling on the floor right now....

Today, it's a million project because half of the potential workers are going to fall down on the job and call "THE HEAVY HITTERS" law firm to sue the City, the construction firm, the State, ..... let's just sue EVERYBODY.

In China, they built the Three Gorges Dam that generates 22,000 MW of electricity and displaced over a million residents in the name of progress. We can't tear down a 100 year old building that's halting traffic in a minor city without a Supreme Court case. Can't we find some sort of happy medium?

***************************************************************************While I'm on the subject of bad ideas in NYS -- Some Regents Exams Could Be Cut. I have a sense that this is a media ploy to gain sympathy for the plight of our schools because it seems like such a drastic step to save a measly $13 million/year.

NYS is facing a $9 billion budget gap and $13 million frankly doesn't do anything to address that gap other than get people riled up. For a little perspective, this is like you owing $9,000 to your credit card company and deciding to fore go 2 Subway foot longs with a drink "to close your personal budget gap".

While the Regents diploma has been substantially watered down over the past 20 years it still carries some weight and a student's performance on these tests can help colleges evaluate students that may not perform well on the SATs.

Two years ago almost every school in NNY was pushing forward with large capital projects because the state was flush with Wall Street cash that they wanted to reinvest in the schools. Consider the case of local school XYZ....

"XYZ Central School:The district built a clinic that is scheduled to open in November. The school's largest construction project, a $12.8 million new gymnasium and renovation project, will begin in October."

This for a school district with k-12 enrollment of about 600 kids. This is not a unique story - there were massive capital projects at numerous local schools in recent years. Clearly, the regents exams are more valuable for the State as a whole than one new gym for a tiny district.

******************************************************************************One final local thought - Could we please hire some more State Police, Border Patrol, or State Park Police for our area? Snark off.

I had to run a recovery run today - just 3.5 miles - that I covered in about 34 minutes (no laughing please). During that time I passed 2 State Police patrols, 1 Sheriff SUV, 1 Border Patrol SUV and 1 State Park Police vehicle. 5 police cars in a town of 2,000 people in a 30 minute period. Either we have too many police patrols in our area with nothing to do but burn $3 gas in their SUVs that get about 12 mpg in stop and go village traffic or we must live in an area with a terrify crime rate and I better install some added home security measures :)

*********************************************************************************This might turn into the story of the day, but it's a little early to say what the real impact on the Chinese markets may be....

China to Nullify Financing Guarantees by Local Governments

China plans to nullify all guarantees local governments have provided for loans taken by their financing vehicles as concerns about credit risks on such debt surges.

The Ministry of Finance will also ban all future guarantees by local governments and legislatures in rules that may be issued as soon as this month, YanQingmin, head of the banking regulator’s Shanghai branch, said in an interview. The ministry held meetings on the rules on Feb. 25 with regulators including the China Banking Regulatory Commission and the People’s Bank of China, Yan said March 5.Cheers!

Friday, March 05, 2010

For all of the prep work done by some members of the Administration telling us to brace for the jobs report, it wasn't all that bad.

Nonfarm payroll employment was little changed (-36,000) in February, and the unemployment rate held at 9.7 percent, the U.S. Bureau of Labor Statistics reported today. Employment fell in construction and information, while temporary help services added jobs. Severe winter weather in parts of the country may have affected payroll employment and hours; however, it is not possible to quantify precisely the net impact of the winter storms on these measures. ...Major winter storms affected parts of the country during the February reference periods for the establishment and household surveys. In the establishment survey, the reference period was the pay period including February 12th. In order for severe weather conditions to reduce the estimate of payroll employment, employees have to be off work for an entire pay period and not be paid for the time missed. Workers who received pay for any part of the reference pay period, even one hour, are counted in the February payroll employment figures. While some persons may have been off payrolls during the survey reference period, some industries, such as those dealing with cleanup and repair activities, may have added workers.

So the weather impact appears to have been minimal but census hiring looks to have added 15,000 jobs.

I'll be interested to see the magical birth/death adjustment which for some reason is not online yet. That won't help fight off the tinfoil hat crowd.

More coming soon.

UPDATE:

The hours worked data is one of the key leading indicators within the jobs report and it is decidedly negative...

The average workweek for all employees on private nonfarm payrolls declinedby 0.1 hour to 33.8 hours in February. The manufacturing workweek for allemployees dropped by 0.4 hour to 39.5 hours, and factory overtime decreasedby 0.2 hour over the month. In February, the average workweek for productionor nonsupervisory employees on private nonfarm payrolls fell by 0.2 hour to33.1 hours.

This could be a result of the poor winter weather, but it's worth noting. As someone else noted, with the average work week down to just 33.8 hour we're practically a nation of part-timers.

Thursday, March 04, 2010

The markets exhaled as jobless claims dipped a bit last week but there is some concern that the snow caused government offices to close early and that might have impacted claims data. We might seen an unusually large uptick next week. Friday's jobless data might be all over the map as a result of the crazy weather in the Northeast over the past month.

* A surprisingly gut wrenching personal account of one family's battle with cancer and the shocking end of life costs over a Bloomberg. End of life warning for $618k.

* Chilling accounts from Chile on the situation post earthquake. I think earthquake-fatigue and the lower casualty count relative to Haiti has removed this story from our collective consciousness, but I think we need to be aware of the devastation of that country's infrastructure. From Clarin - translated roughly into English....

"Its hordes killing and robbing, they don’t leave anything standing. And here I am with my wife and two kids, they are terrified. This is worse than the earthquake, we cant stand it no more, we have no power, no water, no gas, no oil, nothing. We organized with four other neighbors to defend ourselves. and "My house is still standing and my family is ok, but the situation is anarchic. I had to send my wife and 3 daughters to a friends house in a gated community to protect them, and with another 7 neighbors we are protecting what little we have left."*Stat of the day - It will take the US economy 17 years of growth at 5%/year (a growth rate far above historical norms) to lower our Debt to GDP ratio back down to a historical norm. If growth comes in at 3%/year -- it would take 28 years to bring our Debt to GDP back in line.

* Stat of the day Part Deux - From 2002 to 2007 the income at the top 1% of households grew 62% vs just 4% growth for the bottom 90% of households. Thus, income disparity is at it's widest level since 1928!! No wonder there is so much angst among voters.

* Gov. Christie is making waves -- no pun intended :) -- in NJ with a plan to kick part-time workers out of the state's pension system. He's also been in the news for cutting state aid to schools. I think he's operating in a bit of a bubble - he may ultimately balance the state budget but towns will just pass the costs along to citizens via higher property taxes. Nothing gets you voted out of office faster than rising property taxes, but I give him credit for telling the truth.

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About Me

I grew up in La Fargeville before attending college in Manhattan and ultimately working on Wall Street for about 10 yrs. I left NYC/NJ in 2003 and relocated my family to the beautiful waterfront of Clayton, NY. I spend my days caring for my 2 daughters and dabbling in the markets.